Navigating the marketplace

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Fraser Trebilcock teamed up with Lansing Regional Chamber of Commerce to present a free seminar to help employers keep up with changes related to Health Care Reform. This is the fourth presentation in the Business Education Series, titled "Navigating the ACA Marketplace: Guidance for Small Businesses and Individuals". Michael James, Senior Health Care and Business Attorney from Fraser Trebilcock, presented the keynote presentation.

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Navigating the marketplace

  1. 1. NAVIGATING THE MARKETPLACE Guidance for Small Businesses and Individuals Michael P. James, JD, MBA, CSSGB Phone: (517) 377-0823 (313) 237-7300 Email: mjames@fraserlawfirm.com www.linkedin.com/in/MichaelJamesLaw © 2013 Fraser Trebilcock Davis & Dunlap, P.C.
  2. 2. HealthCare.gov
  3. 3. Navigating the Marketplace    Health Insurance Marketplace/Exchange Overview What has Gone Wrong? What is the Impact?  Individual Market  Small Employers     Cancellation Notices Shopping for Health Insurance What does the Future Hold? Strategy & Compliance
  4. 4. Health Insurance Marketplaces  Health Insurance Marketplaces / Exchanges.    Open enrollment: October 2013 ??? Plans go into effect: January 2014 Michigan has a federally-facilitated health insurance marketplace.
  5. 5. Health Insurance Marketplaces Marketplace Metals  ACA uses “Metal Levels” to standardize insurance products offered on exchange to individual and small group markets.  Based on actuarial values.  The percentage of total average costs for covered benefits that a plan will cover. Platinum 88-92% AV Gold 78-82% AV Silver 68-72% AV Bronze 58-62% AV
  6. 6. Health Insurance Marketplaces Essential Health Benefits 1) 2) 3) 4) 5) Ambulatory Patient Services Emergency Services Hospitalization Maternity and Newborn Care Mental Health & Substance Use Disorder Services; Behavioral Health Treatment 6) Prescription Drugs 7) Rehabilitative and Habilitative Services and Devices 8) Laboratory Services 9) Preventative Wellness Services and Chronic Disease Management 10) Pediatric Services, Including Oral and Vision Care
  7. 7. Health Insurance Marketplaces
  8. 8. Health Insurance Marketplaces How Does it Work?
  9. 9. Health Insurance Marketplaces How Does it Work? - What You See
  10. 10. Health Insurance Marketplaces How Does it Work? - What You See
  11. 11. Health Insurance Marketplaces How Does it Work? - Behind the Scenes
  12. 12. Health Insurance Marketplaces How Does it Work? - Enrollment
  13. 13. What is going on with the Marketplace?
  14. 14. What is going on with the Marketplace?         Software and Hardware Problems Account Creation Errors High User Volume Difficulties Tax Credit Verification Errors Security Risks Improper Enrollment in Federal/State Health Care Programs Improper Data Transmission Communication Errors throughout Marketplace
  15. 15. What is going on with the Marketplace?
  16. 16. Impact of Delay
  17. 17. ACA Individual Health Insurance Mandate  The individual health insurance mandate requires nearly all Americans to purchase and maintain health insurance.  Qualified coverage evidenced through tax returns.
  18. 18. ACA Individual Health Insurance Mandate  If an individual fails to have minimally essential coverage, he or she will be required to pay an excise tax. 2014: Penalty is $95 per adult and $47.50 per child (up to $285 for a family) or 1.0% of family income, whichever is greater. 2015: Penalty is $325 per adult and $162.50 per child (up to $975 for a family) or 2.0% of family income, whichever is greater. 2016 and Beyond: Penalty is $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5% of family income, whichever is greater.
  19. 19. Impact of Delay on Individual Health Insurance Mandate   Deadline for individuals to sign up for health insurance before facing tax penalties extended to March 31, 2014. Under ACA and tax regulations, individuals are required to have health insurance coverage in place starting in 2014.  “Short Coverage Gaps” protects individual for not having coverage up to 3 months.   Short Coverage Gap would have protected uninsured individual from penalties until March 31, 2014. In practice, an individual must sign up by the 15th of a given month in order for health insurance to start the first day of the next month.  Would have required insurance application by February 15, 2014 to qualify for Short Coverage Gap protection.
  20. 20. Small Businesses Under 50 FTEs    There is no insurance requirement. Employers do not have to offer insurance. However, if health insurance offered, must meet Essential Health Benefits and metals.
  21. 21. Small Business Health Option Programs Small Business Health Option Programs (SHOP)  Open to all small businesses in 2014.      Must have 50 FTEs or less. In 2014, employer chooses one insurance product for all employees. In 2015, employer picks the metal level, employees choose the insurance product. In 2016, SHOP expands to businesses with up to 100 FTEs. In 2017+, States have option to expand SHOP eligibility to large groups.
  22. 22. Impact of Delay on Small Businesses    Open enrollment originally pushed back from October 1, 2013 to November 1, 2013. Open enrollment for small businesses has been pushed back again until the end of November 2013. Impact:    Small businesses will only have the first half of December 2013 to enroll in a health plan in order for coverage to begin January 1, 2014. Small businesses will only have 2 weeks to evaluate SHOP health plans and make a decision. Critical for businesses with health plans terminating at the end of 2013.
  23. 23. Cancelled Health Plans  Affects individuals who buy health insurance directly from carriers and some small businesses.  Individuals impacted in 2013.  Small businesses impacted in 2013 and 2014.  Census Bureau says about 4% of the population affected, or 11 Million consumers.  Health insurance plan in place this year won’t be sold anymore.  The plan is no longer compliant.
  24. 24. Cancelled Health Plans “If you like your health insurance plan, you can keep it.”
  25. 25. Cancelled Health Plans  What should you do if you received a cancellation letter?  Shop Around  What alternative plan is your carrier offering to replace the cancelled coverage?  What are other carriers offering?  What products are available through the Marketplace?  Tax Credits  For small businesses and individuals to be eligible for tax credits, insurance must be purchased through the Marketplace.
  26. 26. Shopping for Health Insurance Individual Premium Tax Credits  1) Must purchase coverage through the Marketplace.  2) Up to 400% of the federal poverty line: $11,490 (100%) up to $45,960 (400%) for one individual.  $15,510 (100%) up to $62,040 (400%) for a family of two.  $23,550 (100%) up to $94,200 (400%) for a family of four.      3) You are not able to get affordable coverage through an employer that provides minimum value. 4) You are not eligible for coverage through a government program. 5) You file a joint tax return, if married. 6) You cannot be claimed as a dependent by another person.
  27. 27. Shopping for Health Insurance Small Business Health Care Tax Credits
  28. 28. Shopping for Health Insurance Potential Tax Credits 2010 - 2013 Non-Profit For-Profit Up to 25% of employer contribution to employees’ health insurance premium Up to 35% of employer contribution to employees’ health insurance premium
  29. 29. Shopping for Health Insurance Potential Tax Credits 2014 - 2016 Non-Profit For-Profit Up to 35% of employer contribution to employees’ health insurance premium Up to 50% of employer contribution to employees’ health insurance premium
  30. 30. Shopping for Health Insurance Requirements
  31. 31. Shopping for Health Insurance Requirements Maximum credit available to employers with 10 or fewer FTEs and average annual wages of $25,000 or less.  For each FTE above 10 FTEs, the credit is reduced by 1/15.  For each $1,000 above $25,000 in average wages, the credit is reduced by 1/25.
  32. 32. What Does the Future Hold?    Sources say that Marketplace will not be ready by the end of November. We could see additional delays to SHOP and Individual Mandate. Private Health Insurance Exchanges are on the rise.  Walgreens,  Sears, Darden Restaurants Web-Broker Entities may play a larger role in public marketplace  Currently only available in individual market in federal marketplaces.
  33. 33. What Should You Do?     Develop a Strategy Create a Compliance Plan Monitor Changes in the Law Form a Team of Trusted Advisors
  34. 34. Michael P. James, JD, MBA, CSSGB Fraser Trebilcock Health Care Reform www.mihealthcarelaws.com Fraser Trebilcock Davis & Dunlap, P.C. One Woodward Avenue, Suite 1550 Detroit, Michigan 48226 www.fraserlawfirm.com Phone: (313) 237-7300 Fax: (313) 961-1651 Phone: (517) 377-0823 (313) 237-7300 Email: mjames@fraserlawfirm.com www.linkedin.com/in/MichaelJamesLaw Fraser Trebilcock Davis & Dunlap, P.C. 124 W. Allegan Street, Suite 1000 Lansing, Michigan 48933 www.fraserlawfirm.com Phone: (517) 482-5800 Fax: (517) 482-0887 © 2013 Fraser Trebilcock Davis & Dunlap, P.C.

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